GNRC - Embedded Expectations Analysis - 2020 04 02
ï€ Generac Holdings Inc. (GNRC:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with an 18.0x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about sales and margin expectations and the sustainability of market tailwindsï€ Specifically, management may lack confidence in their ability to meet expectations for sales growth, particularly growth related to home standby generators, as well as their ability to meet expectations for EBITDA margin and savings related to their profitability enhancement program. They may also be concerned about greater-than-expected increases in amortization expense. Moreover, they may be overstating the potential tailwinds related to next generation 5G wireless technology, as well as their success in generating interest surrounding clean energy products. Finally, they may lack confidence in their ability to sustain the continued strength of in-home consultation revenues
Generac Holdings is a designer and manufacturer of a range of power generation equipment and other power products serving the residential, light commercial and industrial markets. The company's products include residential, commercial and industrial standby generators, as well as portable and mobile generators used in a range of applications. Other engine powered products that the company designs and manufactures include light towers which provide temporary lighting for various end markets; commercial and industrial mobile heaters and pumps used in the oil and gas, construction and other industrial markets; and a product line of outdoor power equipment for residential and commercial use.
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